Quebecor Inc. ("Quebecor" or the "Corporation")
(TSX:QBR.A)(TSX:QBR.B) today reported its consolidated financial
results for the first quarter of 2012. Quebecor consolidates the
financial results of its Quebecor Media Inc. ("Quebecor Media")
subsidiary, in which it holds a 54.7% interest.
First quarter 2012 highlights
-- Revenues: $1.06 billion, up $73.5 million (7.4%) from the first quarter
of 2011.
-- Operating income:(1) Up $27.9 million (9.5%) to $322.2 million.
-- Net income attributable to shareholders: $72.9 million ($1.15 per basic
share), up $38.6 million ($0.62 per basic share) from $34.3 million
($0.53 per basic share) in the first quarter of 2011.
-- Adjusted income from continuing operations:(2) $39.3 million ($0.62 per
basic share), up $3.4 million ($0.06 per basic share) from $35.9 million
($0.56 per basic share) in the first quarter of 2011.
-- In the first quarter of 2012, Videotron Ltd. ("Videotron") recorded
substantial revenue increases from Internet access services ($23.0
million or 13.7%), cable television service ($22.4 million or 9.1%),
mobile telephony service ($16.9 million or 81.6%), and cable telephony
service ($4.4 million or 4.1%). The Telecommunications segment's
operating income was up $48.5 million (19.1%).
"Quebecor's revenues and operating income increased 7.4% and
9.5% respectively in the first quarter of 2012, once again
reflecting the Telecommunications segment's sustained performance,"
said Pierre Karl Peladeau, President and Chief Executive Officer of
Quebecor. "Revenues increased significantly for all of Videotron's
main services, driving the Telecommunications segment's operating
income up $48.5 million or 19.1% from the first quarter of 2011.
The number of subscriber connections to the mobile telephony
service stood at 312,800 as of March 31, 2012, an increase of
22,200. Videotron also announced the launch of illico TV new
generation, featuring an entirely new interface for accessing
digital services, and innovative functionalities that support
smoother and more intuitive navigation. Videotron continues to
reinvent its services in order to deliver a consistently superior
customer experience to subscribers.
"Another highlight of the first quarter of 2012 was the 2012
season of Star Academie, broadcast on the TVA Network. The program
has become a Quebec institution and has positive ripple effects
across Quebecor Media's properties. The weekly galas were seen by
an average of 2.2 million viewers and the Star Academie 2012 CD has
sold more than 125,000 copies to date, topping the Canadian
French-language charts. The show and its tie-in products have
achieved very important penetration in the Quebec French-language
market.
"In the News Media segment, the Canoe network logged 10.5
million unique visitors in March 2012, up 12.9% from December
2011,(3) because of Sun Media Corporation's successful new approach
for the websites of its urban dailies and community newspapers.
This new milestone confirms Canoe's strong position in the Canadian
marketplace. In Quebec, it now ranks second, just behind behemoth
Google.
(1) See "Operating income" under "Definitions"
(2) See "Adjusted income from continuing operations" under "Definitions"
(3) Source: comScore Inc., Properties category, home/work, Canada
"The new exclusive agreement to distribute the Sears Canada Inc.
national flyer in the Le Sac Plus door-knob bag, that will be
supported by a multiplatform media campaign in all our media
properties, is another example of the complementary fit among our
multiproduct offerings. Meanwhile, Quebecor MediaPages(TM) launched
the videotron.smartfind.ca and videotron.trouvetout.ca search
engines, a new web and mobile platform that supports consumer
searches for local merchants. Finally, Sun Media Corporation
launched four new community weeklies in Ottawa, Windsor,
Kitchener-Waterloo and Guelph, which will reach more than 400,000
Ontario households.
"However, the financial results of the News Media and
Broadcasting segments continued to be adversely affected by the
impact of increased competition and the economic environment for
the advertising market, as well as the significant capital
expenditures required for the launch of new products and
services.
"In the Leisure and Entertainment segment, Archambault Group
Inc. ("Archambault Group") launched ZIK, a music streaming service
that offers unlimited interactive access to more than 12 million
tracks, including the largest selection of French-language music
with 1.2 million titles. ZIK positions Archambault Group at the
forefront of a technological, musical and cultural revolution. The
service puts Quebec culture and artists front and centre, while
offering unique editorial content.
"Finally, in late March 2012, Quebecor Media and Quebec City
announced the finalization of the functional and technical program
for the multipurpose arena to be built in Quebec City. Construction
is slated to begin in September 2012.
"This year, we are beginning to reap the fruit of our
investments in our various businesses over the past three years, as
the large increases in operating income and cash flows in our
Telecommunications segment tend to indicate. The excellent first
quarter results mark a positive start to 2012, a year that should
see a number of attractive projects that hold considerable promise
for the Corporation's long-term development and profitability."
Table 1
Quebecor first quarter financial highlights, 2008 to 2012
(in millions of Canadian dollars, except per share data)
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2012(1) 2011(1) 2010(1) 2009(2) 2008(2)
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Revenues $ 1,064.0 $ 990.5 $ 948.1 $ 903.3 $ 884.7
Operating income(3) 322.2 294.3 290.4 272.2 256.7
Net income from continuing
operations attributable to
shareholders 72.9 34.3 34.9 57.7 45.1
Net income attributable to
shareholders 72.9 34.3 34.9 57.7 428.4
Adjusted income from continuing
operations(4) 39.3 35.9 43.4 43.1 34.6
Per basic share:
Net income from continuing
operations attributable to
shareholders 1.15 0.53 0.54 0.90 0.70
Net income attributable to
shareholders 1.15 0.53 0.54 0.90 6.66
Adjusted income from
continuing operations(4) 0.62 0.56 0.67 0.67 0.54
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(1) Financial figures for the first quarters of 2010 to 2012 are presented
in accordance with International Financial Reporting Standards
("IFRS").
(2) Financial figures for the first quarters of 2008 and 2009 are presented
in accordance with Canadian Generally Accepted Accounting Principles
("GAAP").
(3) See "Operating income" under "Definitions"
(4) See "Adjusted income from continuing operations" under "Definitions"
2012/2011 first quarter comparison
Revenues: $1.06 billion, an increase of $73.5 million
(7.4%).
-- Revenues increased in Telecommunications ($62.6 million or 10.7% of
segment revenues), Broadcasting ($10.7 million or 10.0%), Interactive
Technologies and Communications ($9.8 million or 36.6%), and Leisure and
Entertainment ($5.7 million or 9.3%).
-- Revenues decreased in News Media ($7.0 million or -2.9%).
Operating income: $322.2 million, an increase of $27.9 million
(9.5%).
-- Operating income increased in Telecommunications ($48.5 million or 19.1%
of segment operating income) and Interactive Technologies and
Communications ($2.1 million or 233.3%).
-- Operating income decreased in News Media ($11.7 million or -41.3%),
Broadcasting ($10.4 million) and Leisure and Entertainment ($0.9 million
or -75.0%).
-- The change in the fair value of Quebecor Media stock options resulted in
a $4.7 million unfavourable variance in the stock-based compensation
charge in the first quarter of 2012 compared with the same period of
2011. The change in the fair value of Quebecor stock options resulted in
a $6.5 million unfavourable variance in the Corporation's stock-based
compensation charge in the first quarter of 2012.
-- Excluding the impact of the consolidated stock-based compensation
charge, the increase in operating income in the first quarter of 2012
would have been 13.5%, compared with a 5.9% decrease in the same period
of 2011.
Net income attributable to shareholders: $72.9 million ($1.15
per basic share) compared with $34.3 million ($0.53 per basic
share) in the first quarter of 2011, an increase of $38.6 million
($0.62 per basic share).
-- The increase was due mainly to:
-- $71.4 million favourable variance in gain on valuation and
translation of financial instruments;
-- $27.9 million increase in operating income;
-- $8.4 million favourable variance in the charge for restructuring of
operations, impairment of assets and other special items.
Offset by:
-- $20.5 million increase in amortization charge;
-- $14.5 million goodwill impairment charge recognized in the first quarter
of 2012.
Adjusted income from continuing operations: $39.3 million in the
first quarter of 2012 ($0.62 per basic share) compared with $35.9
million ($0.56 per basic share) in the first quarter of 2011, an
increase of $3.4 million ($0.06 per basic share).
Financing activities
-- In March 2012, Videotron issued US$800.0 million principal amount of 5%
Senior Notes maturing in 2022.
-- In March 2012, Videotron redeemed all of its 6 7/8% Senior Notes
maturing in January 2014 in the aggregate principal amount of US$395.0
million.
-- In March and April 2012, Quebecor Media redeemed US$260.0 million
aggregate principal amount of its 7 3/4% Senior Notes maturing in March
2016 and settled hedging contracts.
-- Quebecor Media and TVA Group Inc. ("TVA Group") amended their bank
credit facilities to extend the maturity dates to 2016 and 2017
respectively and added a new $200.0 million revolving credit facility
"C" for Quebecor Media, maturing in 2016.
-- Sun Media Corporation repaid the $37.6 million balance on its term loan
credit facility and cancelled all its credit facilities.
Dividends
On May 8, 2012, the Board of Directors of Quebecor declared a
quarterly dividend of $0.05 per share on Class A Multiple Voting
Shares and Class B Subordinate Voting Shares, payable on June 19,
2012 to shareholders of record at the close of business on May 25,
2012. This dividend is designated to be an eligible dividend, as
provided under subsection 89(14) of the Canadian Income Tax Act and
its provincial counterpart.
Detailed financial information
For a detailed analysis of Quebecor's first quarter 2012
results, please refer to the Management Discussion and Analysis and
consolidated financial statements of Quebecor, available on the
Corporation's website at:
http://www.quebecor.com/en/quarterly_doc_quebecor_inc or from the
SEDAR filing service at www.sedar.com.
Conference call for investors and webcast
Quebecor will hold a conference call to discuss its first
quarter 2012 results on May 9, 2012 at 3:30 p.m. EDT. There will be
a question period reserved for financial analysts. To access the
conference call, please dial 1 877 293-8052, access code for
participants 58308#. A tape recording of the call will be available
from May 9 to August 9, 2012 by dialling 1 877 293-8133, conference
number 771360#, access code for participants 58308#. The conference
call will also be broadcast live on Quebecor's website at
www.quebecor.com/en/content/conference-call. It is advisable to
ensure the appropriate software is installed before accessing the
call. Instructions and links to free player downloads are available
at the Internet address shown above.
Cautionary Statement Regarding Forward-Looking Statements
The statements in this press release that are not historical
facts are forward-looking statements and are subject to significant
known and unknown risks, uncertainties and assumptions that could
cause Quebecor's actual results for future periods to differ
materially from those set forth in the forward-looking statements.
Forward-looking statements may be identified by the use of the
conditional or by forward-looking terminology such as the terms
"plans," "expects," "may," "anticipates," "intends," "estimates,"
"projects," "seeks," "believes," or similar terms, variations of
such terms or the negative of such terms. Certain factors that may
cause actual results to differ from current expectations include
seasonality (including seasonal fluctuations in customer orders),
operating risk (including fluctuations in demand for Quebecor's
products and pricing actions by competitors), insurance risk, risks
associated with capital investment (including risks related to
technological development and equipment availability and
breakdown), environmental risks, risks associated with labour
agreements, risks associated with commodities and energy prices
(including fluctuations in the cost and availability of raw
materials), credit risk, financial risks, debt risks, risks related
to interest rate fluctuations, foreign exchange risks, risks
associated with government acts and regulations, risks related to
changes in tax legislation, and changes in the general political
and economic environment. Investors and others are cautioned that
the foregoing list of factors that may affect future results is not
exhaustive and that undue reliance should not be placed on any
forward-looking statements. For more information on the risks,
uncertainties and assumptions that could cause Quebecor's actual
results to differ from current expectations, please refer to
Quebecor's public filings available at www.sedar.com and
www.quebecor.com including, in particular, the "Risks and
Uncertainties" section of Quebecor's Management Discussion and
Analysis for the year ended December 31, 2011.
The forward-looking statements in this press release reflect
Quebecor's expectations as of May 9, 2012, and are subject to
change after that date. Quebecor expressly disclaims any obligation
or intention to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by applicable securities laws.
The Corporation
Quebecor Inc. (TSX:QBR.A)(TSX:QBR.B) is a holding company with a
54.7% interest in Quebecor Media Inc., one of Canada's largest
media groups, with more than 16,000 employees. Quebecor Media Inc.,
through its subsidiary Videotron Ltd., is an integrated
communications company engaged in cable television, interactive
multimedia development, Internet access services, cable telephony
service, and mobile telephony service. Through Sun Media
Corporation, Quebecor Media Inc. is the largest publisher of
newspapers in Canada. It also operates Canoe.ca and its network of
English- and French-language Internet properties in Canada. In the
broadcasting sector, Quebecor Media Inc. operates, through TVA
Group Inc., the number one French-language general-interest
television network in Quebec, a number of specialty channels, and
the SUN News English-language channel. Another subsidiary of
Quebecor Media Inc., Nurun Inc., is a major interactive
technologies and communications agency with offices in Canada, the
United States, Europe, and Asia. Quebecor Media Inc. is also active
in magazine publishing (TVA Publications Inc.), book publishing and
distribution (Sogides Group Inc. and CEC Publishing Inc.), the
production, distribution and retailing of cultural products and
music streaming (Archambault Group Inc. and TVA Films), video game
development (BlooBuzz Studios, L.P.), DVD, Blu-ray disc and
videogame rental and retailing (Le SuperClub Videotron ltee), the
printing and distribution of regional newspapers and flyers
(Quebecor Media Printing Inc. and Quebecor Media Network Inc.),
news content production and distribution (QMI Agency),
multiplatform advertising solutions (QMI Sales), and the publishing
of printed and online directories through Quebecor
MediaPages(TM).
DEFINITIONS
Operating Income
In its analysis of operating results, the Corporation defines
operating income, as reconciled to net income under IFRS, as net
income before amortization, financial expenses, gain on valuation
and translation of financial instruments, charge for restructuring
of operations, impairment of assets and other special items,
impairment of goodwill, loss on debt refinancing, and income tax.
Operating income as defined above is not a measure of results that
is consistent with IFRS. It is not intended to be regarded as an
alternative to other financial operating performance measures or to
the statement of cash flows as a measure of liquidity. It should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. Management believes
that operating income is a meaningful measure of performance. The
Corporation uses operating income in order to assess the
performance of its investment in Quebecor Media. The Corporation's
management and Board of Directors use this measure in evaluating
its consolidated results, as well as the results of the
Corporation's operating segments. This measure eliminates the
significant level of depreciation and amortization of tangible and
intangible assets and is unaffected by the capital structure or
investment activities of the Corporation and its segments.
Operating income is also relevant because it is a significant
component of the Corporation's annual incentive compensation
programs. A limitation of this measure, however, is that it does
not reflect the periodic costs of tangible and intangible assets
used in generating revenues in the Corporation's segments. The
Corporation also uses other measures that do reflect such costs,
such as cash flows from segment operations and free cash flows from
operations. In addition, measures like operating income are
commonly used by the investment community to analyze and compare
the performance of companies in the industries in which the
Corporation is engaged. The Corporation's definition of operating
income may not be the same as similarly titled measures reported by
other companies.
Table 2 below provides a reconciliation of operating income to
net income as disclosed in the Corporation's condensed consolidated
financial statements.
Table 2
Reconciliation of the operating income measure used in this press release to
the net income measure used in the condensed consolidated financial
statements
(in millions of Canadian dollars)
Three months ended March 31
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2012 2011
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Operating income (loss):
Telecommunications $ 303.0 $ 254.5
News Media 16.6 28.3
Broadcasting (5.8) 4.6
Leisure and Entertainment 0.3 1.2
Interactive Technologies and Communications 3.0 0.9
Head Office 5.1 4.8
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322.2 294.3
Amortization (142.0) (121.5)
Financial expenses (83.2) (81.4)
Gain on valuation and translation of financial
instruments 81.9 10.5
Restructuring of operations, impairment of
assets and other special items (1.1) (9.5)
Impairment of goodwill (14.5) -
Loss on debt refinancing (7.3) (9.3)
Income taxes (39.8) (19.8)
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Net income $ 116.2 $ 63.3
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Adjusted Income from Continuing Operations
The Corporation defines adjusted income from continuing
operations, as reconciled to net income attributable to
shareholders under IFRS, as net income attributable to shareholders
before gain (loss) on valuation and translation of financial
instruments, charge for restructuring of operations, impairment of
assets and other special items, impairment of goodwill and loss on
debt refinancing, net of income tax and net income attributable to
non-controlling interests. Adjusted income from continuing
operations, as defined above, is not a measure of results that is
consistent with IFRS. It should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS. The Corporation's definition of adjusted income from
continuing operating activities may not be identical to similarly
titled measures reported by other companies.
Table 3 provides a reconciliation of adjusted income from
continuing operations to the net income attributable to
shareholders measure used in Quebecor's condensed consolidated
financial statements.
Table 3
Reconciliation of the adjusted income from continuing operations measure
used in this report to the net income attributable to shareholders measure
used in the condensed consolidated financial statements
(in millions of Canadian dollars)
Three months ended March 31
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2012 2011
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Adjusted income from continuing operations $ 39.3 $ 35.9
Gain on valuation and translation of financial
instruments 81.9 10.5
Restructuring of operations, impairment of
assets and other special items (1.1) (9.5)
Impairment of goodwill (14.5) -
Loss on debt refinancing (7.3) (9.3)
Income taxes related to adjustments(1) (13.3) 4.4
Net income attributable to non-controlling
interest related to adjustments (12.1) 2.3
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Net income attributable to shareholders $ 72.9 $ 34.3
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(1) Includes the impact of fluctuations in tax rates applicable to adjusted
items, either for statutory reasons or in connection with tax
transactions.
Average Monthly Revenue per User
ARPU is an industry metric that the Corporation uses to measure
its monthly cable television, Internet access, cable telephony and
mobile telephony revenues per average basic cable customer. ARPU is
not a measurement that is consistent with IFRS and the
Corporation's definition and calculation of ARPU may not be the
same as identically titled measurements reported by other
companies. The Corporation calculates ARPU by dividing its combined
cable television, Internet access, cable telephony and mobile
telephony revenues by the average number of basic customers during
the applicable period, and then dividing the resulting amount by
the number of months in the applicable period.
QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in millions of Canadian dollars, except for earnings per share data)
(unaudited) Three months ended March 31
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2012 2011
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Revenues
Telecommunications $ 645.8 $ 583.2
News Media 233.1 240.1
Broadcasting 117.8 107.1
Leisure and Entertainment 67.1 61.4
Interactive Technologies and Communications 36.6 26.8
Inter-segment (36.4) (28.1)
-----------------------------
1,064.0 990.5
Cost of sales, selling and administrative
expenses 741.8 696.2
Amortization 142.0 121.5
Financial expenses 83.2 81.4
Gain on valuation and translation of financial
instruments (81.9) (10.5)
Restructuring of operations, impairment of
assets and other special items 1.1 9.5
Impairment of goodwill 14.5 -
Loss on debt refinancing 7.3 9.3
-----------------------------
Income before income taxes 156.0 83.1
Income taxes:
Current 5.5 0.4
Deferred 34.3 19.4
-----------------------------
39.8 19.8
-----------------------------
Net income $ 116.2 $ 63.3
-----------------------------
-----------------------------
Net income attributable to:
Shareholders $ 72.9 $ 34.3
Non-controlling interests 43.3 29.0
-----------------------------
-----------------------------
Earnings per share attributable to shareholders
Basic $ 1.15 $ 0.53
Diluted 1.14 0.52
-----------------------------
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Weighted average number of shares outstanding
(in millions) 63.5 64.3
Weighted average number of diluted shares (in
millions) 63.7 65.0
-----------------------------
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QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions of Canadian dollars)
(unaudited) Three months ended March 31
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2012 2011
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Net income $ 116.2 $ 63.3
Other comprehensive income:
(Loss) gain on translation of net investments
in foreign operations (0.4) 0.5
Cash flow hedges:
Gain on valuation of derivative financial
instruments 18.9 0.8
Deferred income taxes 2.3 2.2
Defined benefit plans:
Net change in asset limit or in minimum
funding liability - (0.1)
Reclassification to income:
Other comprehensive income related to cash
flow hedges (3.3) -
Deferred income taxes (1.2) -
-----------------------------
16.3 3.4
-----------------------------
Comprehensive income $ 132.5 $ 66.7
-----------------------------
-----------------------------
Attributable to:
Shareholders $ 81.8 $ 36.2
Non-controlling interests 50.7 30.5
-----------------------------
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QUEBECOR INC. AND ITS SUBSIDIARIES
SEGMENTED INFORMATION
(in millions of Canadian dollars)
(unaudited) Three months ended March 31
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2012 2011
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Net income before amortization, financial
expenses, gain on valuation and translation of
financial instruments, restructuring of
operations, impairment of assets and other
special items, impairment of goodwill, loss on
debt refinancing and income taxes
Telecommunications $ 303.0 $ 254.5
News Media 16.6 28.3
Broadcasting (5.8) 4.6
Leisure and Entertainment 0.3 1.2
Interactive Technologies and Communications 3.0 0.9
Head Office 5.1 4.8
-----------------------------
$ 322.2 $ 294.3
-----------------------------
-----------------------------
Amortization
Telecommunications $ 117.4 $ 100.3
News Media 14.5 13.0
Broadcasting 5.3 4.1
Leisure and Entertainment 2.5 2.3
Interactive Technologies and Communications 1.4 0.8
Head Office 0.9 1.0
-----------------------------
$ 142.0 $ 121.5
-----------------------------
-----------------------------
Additions to property, plant and equipment
Telecommunications $ 183.5 $ 177.2
News Media 1.9 5.9
Broadcasting 5.3 8.9
Leisure and Entertainment 0.9 0.4
Interactive Technologies and Communications 1.1 1.0
Head Office 0.5 0.4
-----------------------------
$ 193.2 $ 193.8
-----------------------------
-----------------------------
Additions to intangible assets
Telecommunications $ 18.9 $ 16.9
News Media 2.8 2.1
Broadcasting 0.6 0.8
Leisure and Entertainment 0.7 1.2
Inter-segment (0.5) -
-----------------------------
$ 22.5 $ 21.0
-----------------------------
-----------------------------
QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(in millions of Canadian dollars)
(unaudited)
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Equity attributable to shareholders
------------------------------------------------------
Accumulated
other com-
Capital Contributed Retained prehensive
stock surplus earnings income
----------------------------------------------------------------------------
Balance as of
December 31, 2010 $ 346.6 $ 0.9 $ 943.6 $ 13.7
Net income - - 34.3 -
Other comprehensive
income - - - 1.9
Dividends - - (3.2) -
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Balance as of March
31, 2011 346.6 0.9 974.7 15.6
Net income - - 166.7 -
Other comprehensive
loss - - (31.5) (7.0)
Issuance of shares
of a subsidiary - - - -
Repurchase of Class
B shares (7.1) - (23.1) -
Dividends - - (9.6) -
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Balance as of
December 31, 2011 339.5 0.9 1,077.2 8.6
Net income - - 72.9 -
Other comprehensive
income - - - 8.9
Issuance of Class B
shares 3.6 1.5 - -
Repurchase of Class
B shares (0.1) - (0.3) -
Dividends - - (3.2) -
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Balance as of March
31, 2012 $ 343.0 $ 2.4 $ 1,146.6 $ 17.5
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Equity
attributable
to non-
controlling Total
interests equity
-----------------------------------------------------
Balance as of
December 31, 2010 $ 1,346.9 $ 2,651.7
Net income 29.0 63.3
Other comprehensive
income 1.5 3.4
Dividends (11.9) (15.1)
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Balance as of March
31, 2011 1,365.5 2,703.3
Net income 153.0 319.7
Other comprehensive
loss (40.5) (79.0)
Issuance of shares
of a subsidiary 1.0 1.0
Repurchase of Class
B shares - (30.2)
Dividends (34.6) (44.2)
-----------------------------------------------------
Balance as of
December 31, 2011 1,444.4 2,870.6
Net income 43.3 116.2
Other comprehensive
income 7.4 16.3
Issuance of Class B
shares - 5.1
Repurchase of Class
B shares - (0.4)
Dividends (11.3) (14.5)
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Balance as of March
31, 2012 $ 1,483.8 $ 2,993.3
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QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of Canadian dollars)
(unaudited) Three months ended March 31
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2012 2011
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Cash flows related to operating activities
Net income $ 116.2 $ 63.3
Adjustments for:
Amortization of property, plant and
equipment 108.9 93.0
Amortization of intangible assets 33.1 28.5
Gain on valuation and translation of
financial instruments (81.9) (10.5)
Impairment of goodwill 14.5 -
Loss on debt refinancing 7.3 9.3
Amortization of financing costs and long-
term debt discount 3.7 3.0
Deferred income taxes 34.3 19.4
Other 2.9 0.3
-----------------------------
239.0 206.3
Net change in non-cash balances related to
operating activities (1.7) (35.6)
-----------------------------
Cash flows provided by operating activities 237.3 170.7
-----------------------------
Cash flows related to investing activities
Business acquisitions, net of cash and cash
equivalents - (45.1)
Additions to property, plant and equipment (193.2) (193.8)
Additions to intangible assets (22.5) (21.0)
Other 1.2 3.1
-----------------------------
Cash flows used in investing activities (214.5) (256.8)
-----------------------------
Cash flows related to financing activities
Net change in bank indebtedness (2.6) (3.2)
Net change under revolving credit facilities 1.3 (8.3)
Issuance of long-term debt, net of financing
fees 787.6 319.9
Repayment of long-term debt (518.1) (224.9)
Settlement of hedging contracts (40.5) (105.4)
Issuance of Class B shares 3.6 -
Repurchase of Class B shares (0.4) -
Dividends paid to non-controlling interests (11.3) (11.3)
-----------------------------
Cash flows provided by (used in) financing
activities 219.6 (33.2)
-----------------------------
Net change in cash and cash equivalents 242.4 (119.3)
Effect of exchange rate changes on cash and
cash equivalents denominated in foreign
currencies - 0.2
Cash and cash equivalents at beginning of
period 146.4 242.7
-----------------------------
Cash and cash equivalents at end of period $ 388.8 $ 123.6
-----------------------------
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Cash and cash equivalents consist of
Cash $ 11.6 $ 25.3
Cash equivalents 377.2 98.3
-----------------------------
$ 388.8 $ 123.6
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Interest and taxes reflected as operating
activities
Cash interest payments $ 21.4 $ 36.1
Cash income tax payments (net of refunds) 5.1 13.9
-----------------------------
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QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions of Canadian dollars)
(unaudited) March 31 December 31
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2012 2011
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Assets
Current assets
Cash and cash equivalents $ 388.8 $ 146.4
Accounts receivable 562.2 603.7
Income taxes 30.1 29.0
Inventories 278.7 283.6
Prepaid expenses 48.8 31.3
------------------------------
1,308.6 1,094.0
Non-current assets
Property, plant and equipment 3,235.1 3,211.1
Intangible assets 1,022.1 1,041.0
Goodwill 3,528.8 3,543.8
Derivative financial instruments 27.2 34.9
Deferred income taxes 26.5 20.6
Other assets 96.7 93.4
------------------------------
7,936.4 7,944.8
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Total assets $ 9,245.0 $ 9,038.8
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------------------------------
Liabilities and equity
Current liabilities
Bank indebtedness $ 1.6 $ 4.2
Accounts payable and accrued charges 694.2 776.5
Provisions 26.0 33.7
Deferred revenue 295.9 295.7
Income taxes 4.5 2.7
Derivative financial instruments 27.9 -
Current portion of long-term debt 395.0 114.5
------------------------------
1,445.1 1,227.3
Non-current liabilities
Long-term debt 3,549.4 3,688.3
Derivative financial instruments 281.0 315.4
Other liabilities 344.5 344.7
Deferred income taxes 631.7 592.5
------------------------------
4,806.6 4,940.9
Equity
Capital stock 343.0 339.5
Contributed surplus 2.4 0.9
Retained earnings 1,146.6 1,077.2
Accumulated other comprehensive income 17.5 8.6
------------------------------
Equity attributable to shareholders 1,509.5 1,426.2
Non-controlling interests 1,483.8 1,444.4
------------------------------
2,993.3 2,870.6
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Total liabilities and equity $ 9,245.0 $ 9,038.8
------------------------------
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Contacts: Jean-Francois Pruneau Chief Financial Officer Quebecor
Inc. and Quebecor Media Inc.jean-francois.pruneau@quebecor.com
(514) 380-4144 J. Serge Sasseville Senior Vice President, Corporate
and Institutional Affairs Quebecor Media
Inc.serge.sasseville@quebecor.com (514) 380-1864
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